MENARDS, THE THIRD-LARGEST HOME improvement retailer in the United States, is more than 75 percent through the build-out of 164 single-family homes in a subdivision it is developing in Yorktown, Ill. The Eau Claire, Wis.–based dealer has received approval for phase two of this development, which will have 260 townhouses.

The company has at least five such projects in the works, including a 300-acre development in Urbana, Ill., and a 60-home subdivision in Warsaw, Ind. As has been its M.O. in other markets, Menards will construct a $6 million, 162,340-square-foot home center near the community in Warsaw. Jamie Radabaugh, Menards' sales and leasing director, tells BUILDER that his company plans to develop communities around more stores, which through early June numbered 224 stores in 11 states.

Contractors working with Menards sign an agreement to purchase building products through its stores, which is okay with Chad Gunderson, CEO of AMG Homes. Gunderson says the dealer is “very rational” about this arrangement; for example, he buys foundation concrete or longer lengths of guttering elsewhere because Menards doesn't sell them. The houses AMG is building for Menards in Yorktown range from 1,700 square feet to 3,700 square feet, and are priced from the $260,000s to the $400,000s.